- The DWP received a record number of Pension Credit applications, up 81%, since chancellor Rachel Reeves announced the Winter Fuel Payment will be means-tested (Pension Credit applications and awards: February 2025 – GOV.UK)
- Around 235,000 Pension Credit claims have been made since the announcement in July 2024, compared to 129,900 in the corresponding period in 2023 to 2024
- However, there was also a 133% increase in the number of Pension Credit claims being denied, up to 114,500 since the Winter Fuel Payment announcement
- Pension Credit has historically been chronically underclaimed, with over a third of those eligible failing to fill out the relevant forms each year
Rachel Vahey, head of public policy at AJ Bell, comments:
“The DWP today is celebrating a surge in the number of Pension Credit claims, and with good reason given uptake has been poor in the past. But the fact it comes off the back of Rachel Reeves’ decision to means-test the Winter Fuel Payment may leave a bad taste with some. The chancellor’s announcement last July caused fury among retirees and campaigners with the benefit, worth up to £300, now only available to low-income pensioners who qualify for Pension Credit top-ups.
“While the jump in Pension Credit claims received and awarded is significant and the government should be lauded for its efforts to boost applications, the flipside is that there was also a jump in the proportion of claims being denied. As many pensioners rushed to claim in fear of losing their Winter Fuel Payment, some will not have met the criteria and subsequently been told they cannot receive payments. People are often encouraged to apply if they think they’re close to the threshold for Pension Credit and there is no harm in doing so if you’re unsure, but there will also be plenty of people who applied with little knowledge of the eligibility rules and this lack of understanding of the Pension Credit process will likely continue to be a challenge in years to come.
“Pension Credit has historically been chronically underclaimed, with over a third of households who could be eligible failing to make a claim each year. This could be for a number of reasons, from a lack of awareness to difficulties filling out forms or a reluctance to be seen as a benefit claimant. But the result is hundreds of thousands of people missing out on a vital source of income worth thousands of pounds a year on average.
“The decision to means-test the Winter Fuel Payment means it’s even more important for those who could qualify for Pension Credit to make a claim. The fact these latest figures show a surge in applications suggests the announcement has spurred many people into action.
“While this process can feel intimidating, it is worth doing if you think you might qualify. The DWP offers a useful online tool to check if you might qualify for Pension Credit before going through the application service, and organisations like Citizens Advice and Age UK can also help guide you through the process.”
Pension credit explained
Pension Credit is a key benefit provided by the state which often tends to go unclaimed by lower income retirees.
In 2024/25, if you are over state pension age (66), single and your income is less than £218.15 a week then pension credit will top you up to that amount. For a couple, the combined income figure is £332.95.
In relation to Pension Credit, your income includes your state pension, other pensions, employment or self-employment earnings and most social security benefits. As with the state pension, it is up to you to claim Pension Credit.
For those who are entitled to receive it, claiming Pension Credit is also really important because it acts as a gateway to other benefits, such as help with heating costs, housing benefit, dental treatment and free TV licenses (if you are aged 75 or over). The decision to end universal Winter Fuel Payments means it also becomes a gateway to the means-tested Winter Fuel Payment.
*Source: Income-related benefits: estimates of take-up: financial year ending 2023 – GOV.UK
